Re: Question about ANWAR

On Aug 3, 8:15 pm, "The Cheesehusker, Trade Warrior"
<Iamtj4l...@xxxxxxxxx> wrote:
On Aug 1, 8:18 pm, Chris Mihos <cmi...@xxxxxxxxx> wrote:



At the risk of starting Yet Another Round of Partisan Bickering:

OK, so all this talk about needing to drill in ANWAR to help the
energy crisis got me trying to dig up information. So on the DOE
website there is a document (dated 2008) about projections of ANWAR
production and effect on oil prices. It's here

http://www.eia.doe.gov/oiaf/servicerpt/anwr/pdf/sroiaf(2008)03.pdf

(I would *think* DOE should be relatively even handed in the analysis,
it's not like I'm pulling a document off of the DNC or GOP website.)
The summary (page 6, last paragraph) says that the expected impact on
world oil prices is a drop in price of $0.4 / barrel (low estimate) to
$1.44 / barrel (high estimate). So that's about 0.5-1% reduction in
oil prices.

Is a 1% drop in the price of oil really going to lead to a significant
change in the price of gas?

What am I missing? Seriously, I'm not an economist here, maybe I'm
being a bit naive. But such a small drop in crude cost doesnt seem
like it will produce any real drop in energy costs.

Stop.

First - this is not a good assumption to make, for it presumes static
pricing structures strictly dependent on supply. The last 8 years and
the rise of Chinese and Indian demand have shown that price has MANY
components to it - supply being just one part. The price of oil has
fallen $20 in the last what, 3 weeks? w/o ANWAR being drilled.
Academic exercises like this are simply that - academic exercises.

Second - regardless of price, the way this question needs to be framed
is whether or not it is "worth" it to utilize our resources prior to
the purported exhaustion of other resources/Ricardo analysis.

Third - realistically, and you can put this in pen, a chunk of ANWAR
oil will be exported - better return to ship to say Japan and China
than the domestic markets.

Enough for now. ANWAR can/won't do much. Depends on what you're
seeking here and why.

Knowledge is power, but just not in the oil business:

http://www.powerlineblog.com/archives2/2008/08/021150.php

t's unfortunate that, at least until this Friday, Barack Obama opposed
off-shore drilling. Still, this is a policy issue on which reasonable
people probably can differ and certainly could before gasoline prices
skyrocketed. But, as I set forth below, Obama has also led a one-man
crusade to keep the American people ignorant about what's at stake in
the debate over off-shore drilling. This, it seems to me, is almost
criminal. For it implies that there is no set of facts under which we
should ever consider drilling off-shore. The absurdity of that
position, always apparent, is confirmed by Obama's willingness to flip
on the issue.

Here's the background. In 2005, Congress considered energy legislation
that included an off-shore inventory. The inventory would provide an
estimate of our off-shore reserves. Taking it wouldn't mean drilling;
it would just tell us what's out there. Yet Obama voted to kill the
off-shore inventory provision. So, unfortunately, did John McCain.
However, the effort to kill the inventory failed, and the first
inventory report was issued in February 2006.

Obama, though, did not give up in his efforts to keep the public
ignorant. In January 2007, he proposed legislation to eliminate the
authorization to conduct the inventory, as established in the 2005
law. Obama's bill is S. 115. The key provision is section 101(a)(5).
It provides that "Section 357 (42 U.S.C. 15912) (relating to
comprehensive inventory of OCS oil and natural gas resources)" is
"repealed as of the date of enactment of this act." It's my
understanding that Obama is the only sponsor of this legislation.

Ironically, Obama called his legislation "The Oil SENSE Act." How
audacious a label for an act that would deprive the public of key
information relevant to deciding whether off-shore drilling makes
sense. As far as I know, Obama's legislation is still pending.

It's wonderful that Obama now thinks it might be ok to drill off-
shore, provided that such drilling is part of an "overarching really
thoughtful" energy package. Perhaps now, as part of the package, Obama
will stop opposing an inventory of our off-shore energy assets. After
all, if Obama is prepared to support drilling, he no longer needs to
keep voters in the dark about what we are losing by not drilling.

------------------------

-Tom Enright
.

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